Existing flexible asset allocation funds, also known as go-anywhere funds increased from 61 in January 1998, to 110 in June 2013. Total assets for this group of funds climbed from $60 billion to $356 billion over the 15 year period. Thee strategy has gained favor as they allow fund managers to "seek returns from a wide range of sources, without style, regional, sector, market-cap, or other constraints, they have a broader opportunity set from which to select investments," write Anatoly Shtekhman, Kimberly Stockton, and Brian Wimmer for Vanguard.

But just because go-anywhere funds offer greater opportunity doesn't mean these funds have done well. "The majority of go-anywhere funds underperformed from January 1, 1998, through June 30, 2013, relative not only to a 60% equity/40% bond passive allocation but to their stated benchmark and a traditional active balanced fund," the researchers found.

"Likewise, even when compared against more appropriate benchmarks as determined by style analysis and factor regression, the majority of go-anywhere funds have produced an alpha of less than 0%, on average. Thus, it appears that even with a broader opportunity set, consistent alpha is rare."

One of the fundamental maxims cited by wealth advisors when it comes to wealth management and asset allocation is a client's risk tolerance. A recent presentation from FPA Experience Academic Track suggested that "there is a high correlation between client risk tolerance, and the price level of an S&P 500 total return index," according to Michael Kitces at Nerd's Eye View. But Kitces thinks a client's true risk tolerance "appears to be remarkably stable and doesn't change much at all in the midst of volatile markets."

"Instead, what appears to be unstable is not the client's tolerance for risk, but their perceptions of risk in the first place; in other words, clients may be loading up on stocks in bull markets not because they're more tolerant of risk, but because they don't think there is any risk in the first place. In turn, this suggests that ultimately, it may be time for financial planners to more widely adopt quality tools to measure risk tolerance, but simultaneously recognize that managing client (mis-)perceptions of risk is the real challenge that we face."

Independent registered investment advisors (RIAs) saw revenues increase about 20% after the strong stock market run last year, according to the latest TD Ameritrade Institutional Advisor Index Survey. Over 2/3rds of those surveyed said they saw their client base increase 13% and that AUM averaged 20% growth.

Now 38% of RIAs think the stock market will continue moving up, while 46% think it will stay the same. 41% said they think bond prices will fall over the next three months. Stocks now account for 54% of client portfolios, and fixed-income accounts for 23%. This compares with 48% equities and 27% fixed-income allocation last year.

Activist hedge funds seems to be popping up everywhere these days. And it's not without reason. Data from eVestment shows that activist funds returned 19.07% in 2013 and 15.21% in 2012. Here's a look at how various hedge fund strategies performed the last two years.

The extreme cold weather that's swept the nation has sent the price of natural gas soaring. And this offers short-term volatility plays for investors, writes Carl O'Donnell at Investment News. Investors can do this through a range of exchange traded products (ETPs) that track short-term futures contracts. "We are looking at natural-gas prices by the end of 2014 to drop back down to around $3.59 per million BTU," Stewart Glickman, group head of energy and materials at S&P Capital IQ told O'Donnell.